Income Taxes

9 Months Ended

Oct. 03, 2021

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

In the three months ended October 3, 2021, our income tax benefit of $2.2 million on a loss from continuing operations before income taxes and equity in earnings of unconsolidated investees of $86.5 million was primarily due to the deferred taxes on mark-to-market unrealized losses on equity investments. Our income tax provision of $36.7 million in the three months ended September 27, 2020 on a profit from continuing operations before income taxes and equity in earnings of unconsolidated investees of $146.4 million was primarily due to associated domestic tax expenses arising from the taxable gain related to the Spin-Off, and foreign withholding taxes from foreign dividend distributions.

In the nine months ended October 3, 2021, our income tax benefit of $5.0 million on a loss from continuing operations before income taxes and equity in earnings of unconsolidated investees of $64.0 million was primarily due to windfall benefits from stock-based compensation deduction and the true-up of estimated state tax liability. Our income tax provision of $38.7 million in the nine months ended September 27, 2020 on a profit from continuing operations before income taxes and equity in earnings of unconsolidated investees of $223.1 million was primarily due to domestic tax expense arising from the taxable gain related to the Spin-Off, and foreign withholding taxes from foreign dividend distributions.

During the three and nine months ended October 3, 2021, in accordance with FASB guidance for interim reporting of income tax, we have computed our provision for income taxes based on a projected annual effective tax rate. Estimates of the annual effective tax rate at the end of interim periods are, of necessity, based on evaluations of possible future events and transactions and may be subject to subsequent refinement or revision. If a reliable estimate cannot be made, the actual effective tax rate for the year to date may be the best estimate of the annual effective tax rate.

Total liabilities associated with uncertain tax positions were $15.0 million and $12.6 million as of October 3, 2021 and January 3, 2021, respectively. The increase of $2.4 million was primarily due to amounts reclassified from deferred tax liability related to the treatment of equity investment tax gain for states.